With one week left on Congress’ calendar year, Senate approval of S. 1376, the FHA Solvency Act of 2013, before the end of 2013 is becoming more unlikely, according to lobbyists. The bill is stalled and is unlikely to be brought to the floor any time soon. If the housing sector continues to improve, the government-sponsored enterprises continue to generate profit and the FHA’s newer books of business continue to perform well, passing GSE or FHA reform legislation next year would be an uphill battle, lobbyists said. The Congressional Budget Office estimates that implementing S. 1376 would result in ...

The Department of Housing and Urban Development has released a final rule defining a “qualified mortgage” that is insured by the FHA. The final rule will be effective on Jan. 10, 2014. The HUD rule builds off the QM/Ability-to-Repay rule, which the Consumer Financial Protection Bureau finalized earlier this year. The Dodd-Frank Act requires HUD to propose a QM definition that is aligned with the ability-to-repay criteria set out in the Truth in Lending Act and with the agency’s mission to ...

Lenders will need to order a new appraisal for an FHA-insured real estate-owned property if the current REO appraisal is defective or an adverse condition exists that requires a new assessment of the property, according to the Department of Housing and Urban Development. The requirement is one of several that HUD spelled out recently in Mortgagee Letter 2013-44. The mortgagee letter includes changes to HUD’s policies on the use of an FHA-insured mortgage in the purchase of HUD REO properties and the use of distressed properties in ...

More lenders will be able to make mortgage loans to rural homebuyers due to sweeping changes made by the U.S. Department of Agriculture to its single-family home loan guaranty program. Published in the Dec. 9 Federal Register, the changes are part of a broad program overhaul to strengthen rural housing markets, increase the availability of rural home loans and spur the construction of new homes in rural areas. The changes in the interim final rule will take effect on Sept. 1, 2014, and are likely to draw more prospective homebuyers to the program, the agency said. Commenters have until Jan. 8 to ...

Despite two consecutive quarterly production declines, the Department of Veterans Affairs Home Loan Guaranty program is well on its way to a record year due to strong refinance volumes and demand for home-purchase mortgages. Federally guaranteed lending to military service members fell in the third quarter of 2013 by 10.6 percent from the second quarter while volume over the nine-month period increased by 14.9 percent compared to the same period last year, according to Inside FHA Lending’s analysis of VA lending. Over a nine-month period, VA lenders originated an ...

The Department of Housing and Urban Development has issued guidance clarifying FHA lenders’ obligation to report voluntarily instances of fraud, misrepresentation and any other material findings in connection with the origination, underwriting and servicing of FHA-insured loans. Compliance experts say the guidance in Mortgagee Letter 2013-41 is a shot across the industry’s bow – a reminder to lenders about existing FHA policy requiring them to self-report fraud and misrepresentation to the FHA. Upon notification, the FHA works with the lender on any potential mitigation actions. In the inaugural issue of Lender Insight in June, the FHA reported ...

The Department of Housing and Urban Development is considering an industry request to delay the implementation of a proposal requiring FHA lenders to perform a financial assessment of all prospective borrowers of Home Equity Conversion Mortgage loans. In remarks during the National Reverse Mortgage Lenders Association’s recent annual meeting in New Orleans, FHA Commissioner Carol Galante said HUD is still studying the comments and will need more time to implement the rule. In September, the FHA published a notice in the Federal Register seeking comment on the financial assessment proposal. The proposal is currently in ...

With the FHA high-cost loan limit set to decline from its current statutory level of $729,750 to $625,500, the same level as Fannie Mae and Freddie Mac, nobody appears to be pushing for an extension. The temporary maximum loan limit for FHA is set to expire on Dec. 31, unless Congress votes for another extension, which appears unlikely, according to mortgage industry analysts. Neither lawmakers nor the White House have shown support for maintaining the current FHA high-cost loan ceiling. Although no one has conceded that the FHA lending ceiling will go down for certain areas, there has been no effort to ...

Many condominium properties continue to struggle to meet stringent FHA requirements while many condo projects are being denied approval despite the easing of FHA approval requirements in recent years. Panelists at a recent National Association of Realtors conference in New Orleans said condos are often the most affordable homeownership option for first-time homebuyers, single borrowers and senior citizens, especially when purchased with FHA financing. Condominium loans are among the strongest performing loans in the FHA portfolio, they added. However, FHA data show that ...

The Department of Housing and Urban Development has scheduled its next note sale on Dec. 17, following last month’s withdrawal of $450 million of nonperforming notes from the table after bids came up short of the reserve price. The Dec. 17 whole-loan sale will include Neighborhood Stabilization Outcome (NSOs) single-family loan pools, which will be offered, as in several previous HUD note sales, through a competitive bidding process. The offering consists of 5,000 defaulted purchase single-family mortgage loans totaling $1 billion in unpaid principal balances with representations and warranties. Currently, the FHA is selling loans in ...